All retail stores to be rebranded Reliance Fresh
For better focus on its operations, Reliance Retail, a wholly-owed subsidiary of Reliance Industries, is restructuring its business into two broad verticals ? Reliance Fresh and Reliance Trends. While Reliance Fresh would be the front-end retail store selling items ranging from fruits and vegetables to consumer products, Reliance Trends would be the back-end sourcing firm, which would manage the supply chain. At present, retail apparel products are sold at Reliance Trend stores, which would be re-branded into Reliance Fresh stores.
This is the third restructuring of Reliance Retail, which started off with a bang in 2006, and marks the culmination of the simplification process. The business started as a single large entity, but in 2007 the company spun off its various businesses into several small arms to focus on specific sectors.
Reliance Retail declined to comment when contacted for the story.
As part of the restructuring, the front-end stores of the company like Reliancedigital Retail, Reliance Footprint, Reliance Gems and Jewels, Reliance Leisures, Reliance Autozone, Reliance Digital Media, Reliance Replay Gaming and RESQ will be merged under Reliance Fresh and a new branding exercise would be undertaken.
Reliance Trends would handle the back-end supply chain for all the products retailed in Reliance Fresh stores. Moreover, all export- and import-related aspects would be handled by Reliance Trends.
?The restructuring will result in a consolidation of the domestic trade operations and international trade operations in separate companies based on geographical business verticals,? stated a copy of the scheme of amalgamation and arrangement that was approved by the Reliance Retail board of directors on January 5. ?The restructuring will strengthen the leadership in terms of revenues, product range and volumes resulting in enhanced shareholder value?.
The merger, which has been given a green signal by the Reliance Retail board, now awaits the Bombay High Court approval.
The consolidation would boost the asset base of Reliance Fresh by R2,354.60 crore.
Reliance Fresh will also take on liabilities of Rs 2,538.51 crore as part of the consolidation process.
In 2011, Reliance Retail merged nine companies like Reliance Hypermart, Reliance Wellness, Reliance Home Store, Reliance Lifestyle and Reliance Supply Chain with Reliance Fresh.
?The current restructuring process will improve operational efficiencies within the group’s retail business and improve the inventory management,? a person in the know of the development said. ?That is the primary rationale for the restructuring,? he added.
Reliance Retail has been growing at a rapid pace. In 2011-12, its revenue stood at Rs 7,599 crore, a growth of 25% over the previous fiscal. Its revenue in the first three quarters of 2012-13 stood at Rs 7,749 crore, already surpassing last fiscal’s number and clocking a growth of 44% year-on-year.
The company expects to close FY13 with revenues of over Rs 10,000 crore, however, there are no plans for an initial public offering. ?We want to be anywhere between Rs 40,000 crore to Rs 50,000 crore in revenues before tapping into the equity markets,? a company source said.
At the end of December 2012, the company was operating 1,400 stores in 129 cities across India.
